reward theory (copyright) theory...january 21, 2010 © 2008, william fisher. this work is licensed...
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January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Reward Theory (Copyright)
William Fisher September 15, 2009
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
Marginal Cost
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
Marginal Cost
Willingness and ability to pay of consumer X
P(X)
X
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
Willingness and ability to pay of consumer Y
P(X)
X
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
Willingness and ability to pay of consumer Z
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
Aggregate Consumer Demand
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z Q
In the absence of copyright, copying and competition will drive the price down close to marginal cost
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
In the absence of copyright, copying and competition will drive the price down close to marginal cost
P(X)
X
P(Z)
Z
Resultant Consumer Surplus
Q
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z Q
In the absence of copyright, copying and competition will drive the price down close to marginal cost
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z
Profit-Maximizing Behavior by a Copyright Owner who can engage in perfect price discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
P(X)
X
P(Z)
Z
Profit-Maximizing Behavior by a Copyright Owner who can engage in perfect price discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Conditions Created by the Grant of a Copyright
$
Quantity
P(Y)
Y
Marginal Cost
Profit-Maximizing Behavior by a Copyright Owner who can engage in perfect price discrimination
P(X)
X
P(Z)
Z Profit-maximizing output
“Monopoly Profits”
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
$
Quantity
C G
H
Marginal Cost
O
A
I
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
Revenues
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
Costs
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
Profits
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
Revenue loss
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
Revenue loss
Revenue gain
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
Profits
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
r
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
r
w
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
r
w
Revenue loss
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
r
w
Revenue loss
Revenue gain
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
p
u
q
v
r
w
Profit
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
O
A
I
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
C G
H
Marginal Cost
Marginal Revenue
O
A
I
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
B
C
D
E
F
G
H
Marginal Cost
Marginal Revenue
O
A
I
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Marginal Revenue
O
A
I
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
$
Quantity
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
Marginal Revenue
O
A
I
1
Profit-Maximizing Behavior by a Copyright Owner in the absence of Price Discrimination
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Effects of Profit-Maximizing Behavior by a Copyright Owner
$
Quantity
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
O
A
I
1
2
Consumer Surplus
January 21, 2010
© 2008, William Fisher. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 2.5 License.
Economic Effects of Profit-Maximizing Behavior by a Copyright Owner
$
Quantity
B
C
D
E
F
G
H
Marginal Cost
Profit-maximizing output
Prof
it-m
axim
izin
g pr
ice
Monopoly Profits
O
A
I
1
2
3
Consumer Surplus
Deadweight Loss (foregone consumer surplus)
E